OAR 812-012-0150
Letter of Credit Issued to Protect Purchasers of Residential Property from Lien Claims
(1)
As used in this rule, “letter of credit” means an irrevocable standby letter of credit.(2)
A seller of residential property may provide a letter of credit to satisfy the requirements of ORS 87.007 (Protection from construction liens perfected after sale of residential property completed)(2)(c), provided that the letter of credit complies with the following requirements.(a)
The letter of credit must be issued by or confirmed by an Oregon state-chartered bank or a federally chartered bank that has an Oregon branch.(b)
The letter of credit must be issued on or after the date of completion of the residential property. For purposes of this rule, the “date of completion” shall be determined in accordance with ORS 87.045 (Completion date of improvement).(c)
The letter of credit must be issued in an amount of not less than 25 percent of the sales price of the residential property.(d)
The beneficiary of the letter of credit must be the purchaser of the property.(e)
The letter of credit shall remain in effect:(A)
Not less than 75 days after the date of completion if no lien is perfected under ORS 87.035 (Perfecting lien) against the residential property; or(B)
If one or more liens are perfected against the residential property within 75 days from the date of completion, until:(i)
All liens are released and the releases recorded;(ii)
The seller files a bond or makes a deposit and the seller files the required affidavit under ORS 87.076 (Bond or deposit of money) to 87.081 (Filing affidavit with county officer); or(iii)
The issuing or confirming bank pays the purchaser of the property the amount of the lien or the amount of the letter of credit, whichever is less in accordance with the terms of the letter of credit.(f)
The letter of credit can be called by the purchaser of the property immediately if:(A)
The seller of the property permits any construction lien to be placed upon the property;(B)
The seller of the property fails to obtain the release of all construction liens upon the property and have the releases recorded; or(C)
The seller of the property fails to file a bond or deposit and record the required affidavit under ORS 87.076 (Bond or deposit of money) to 87.081 (Filing affidavit with county officer).(g)
The credit shall be available by presentation of the purchaser of the residential property at sight on the issuing, or confirming, bank when accompanied by a notice of lien filing together with the claim of lien, as provided by ORS 87.039 (Notice of filing claim of lien). The credit shall be available within three business days of presentation.
Source:
Rule 812-012-0150 — Letter of Credit Issued to Protect Purchasers of Residential Property from Lien Claims, https://secure.sos.state.or.us/oard/view.action?ruleNumber=812-012-0150.